12 This is the yearend trial balance for Griffin Sporting Go

12. This is the year-end trial balance for Griffin Sporting Goods Store: Griffin Sporting Goods Store Trial Balance January 31, 19x4 Cash Accounts Receivable Merchandise Inventory Store Supplies Prepaid Insurance Store Equipment Accumulated Depreciation, Store Equipment Accounts Payable Albert Griffin, Capital Albert Griffin, Withdrawals Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Purchases Discounts Freight In Rent Expense Store Salaries Expense Advertising Expense Utility Expense 16,500 12,644 187,500 14,340 10,800 303,600 84,400 107,340 252,674 54,000 1,971,420 16,200 1,406,950 24,750 23,700 9,600 74,400 226,500 113,310 $2,464,284 $2,464,284 1. Copy the trial balance amounts into the Trial Balance columns of a work sheet, and complete the work sheet using the following information: ending merchandise inventory, $172,480; ending store supplies inventory, 1,740; insurance unexpired at end of period, $5,400; estimated depreciation, store equipment, $31,800; and accrued store salaries, $750. Use either the adjusting entry method or the closing entry method. 2. Prepare an income statement for the store. Store Salaries Expense; Advertising Expense: Store Supplies Expense; and Depreciation Expense, Store Equipment are selling expenses. The other expenses are general and administrative expenses

Solution

Griffin Sporting Goods Store Trial Balance January 31, 19x4 Adjustments Adjusted Debit Credit Debit Credit Debit Credit Cash               16,500           16,500 Accounts Receivable               12,644           12,644 Merchandise Inventory             187,500         187,500 Store Supplies               14,340     12,600             1,740 Prepaid Insurance               10,800 5400             5,400 Store Equipment             303,600         303,600 Accumulated Depreciation, Store Equipment           84,400 31800         116,200 Accounts Payable         107,340         107,340 Salaries Payable 750                750 Albert Griffin, Capital         252,674         252,674 Albert Griffin, Withdrawals               54,000           54,000 Sales      1,971,420      1,971,420 Sales Returns and Allowances               16,200           16,200 Purchases          1,406,950      1,406,950 Purchases Returns and Allowances           24,750           24,750 Purchases Discounts           23,700           23,700 Freight In                 9,600             9,600 Rent Expense               74,400           74,400 Store Salaries Expense             226,500 750         227,250 Store Supplies Expense 12600           12,600 Advertising Expense             113,310         113,310 Depreciation Expense 31800           31,800 Utility Expense               17,940           17,940 Insurance Expense 5400             5,400 $      2,464,284 $ 2,464,284 $ 50,550 $ 50,550 $ 2,496,834 $ 2,496,834 Income Statement Sales $      1,971,420 Less: Sales return and allowances              (16,200) Net Sales      1,955,220 Less: Cost of goods sold: Opening Inventory             187,500 Add: Purchases          1,406,950 Add: Freight in                 9,600 Less: Purchase returns and allowances              (24,750) Less: Purchase Discounts              (23,700) Cost of goods available for sale          1,555,600 Less: Ending Inventory            (172,480) Cost of goods sold      1,383,120 Gross Profit         572,100 Less: operating expenses Store Salaries Expense             227,250 Advertising Expense             113,310 Store Supplies Expense               12,600 Depreciation Expense               31,800 Total selling expenses $         384,960 Rent Expense               74,400 Utility Expense               17,940 Insurance Expense                 5,400 Total general and administrative expenses $           97,740 Total selling general and administrative expenses $     482,700 Net Income $       89,400